Negotiating lipstick effect and the big squeeze

2020 was meant to be the bad year for the economy. But as Covid seems to fade, 2022’s markets look set to be defined by the cost-of-living crisis, alongside the impact of the war in Ukraine. So how can brands be sensitive to consumers’ tough choices while keeping their business afloat?

Consider your product – As consumers choose which services to cut from their lives (hey Netflix), can you rethink ways your product can be more than single-use? Perhaps there’s an opportunity to reposition your product as an escapist experience. We’ve seen the “lipstick effect” in many crises – can your brand be that luxury?

Choose where you market smartly – A scattergun approach is never clever, but building an effective digital strategy is particularly wise when the coffers are running low. With fewer resources, consider whether that expenditure on print or OOH is really the best use of limited funds. Is a cheaper, witty campaign on TikTok (yes, TikTok) a better move?

Offer trust – People spending money on your brand may now seek greater security – from guarantees to ratings to testimonials. If consumers are making trade-offs to spend money with you, they want to be extra-sure they’re not going to feel cheated. How can you provide that safety?

Be transparent – Costs may have to go up, and customers may well have to get frustrated about it. But honest explanations can help to allay some of this frustration. Show why the hike’s happening and what value they get for their money: what are the tangible benefits? And are there simple additions, such as information or a little more flexibility, your brand can offer?

It’s also important to show empathy about the effect rising prices will have on people’s lives. If you’re touting diamond-studded timepieces, chances are your customer base won’t mind. But grand depictions of extravagant living in leaner times should be executed with consideration.